Paying off debt before it comes to term will def hurt your credit score. The credit score takes in account your oldest aged account as a factor in determining your score as well as it will demonstrate to banks you are capable of handling money.

I have a $10k car loan (1 year old loan). In an attempt to reduce outstanding debt, I made a $4k payment last week. I have slightly less than $1600 left on the loan. Do I:

1. Pay in full immediately/next month; or2. Make the scheduled payments until the loan is satisfied.

Currently, I'm thinking #2 is the best option. By going with #2, the bank would report good standing, on time payments, and at the very least have well-documented history of reliability.

Thanks!

Just increased the amount of payment and get it done faster... It won't hurt your credit. But remember that everytime you try to get a loan and the loan company do a credit check, it hurt your credit score.

In your situation, I would pay off the outstanding balance and own it outright.

My wife and I needed to free up some credit... So we paid off her car balance of $12K in one payment which still had a couple years of payments on it... Her credit went up, the underwriters liked it... and she got approved for a refinance (she owned her house before we got together).

FICO scores are really important for underwriters, but they will also look at your outstanding debt and your monthly payments when you apply for a loan and whether you can afford to pay them back based on your income.

I would pay off the outstanding amount. Not only does banks look at your credit score they also look at how responsible you are with your finances. So if you have the means to pay off your bills, do it.